Senate to weigh measure delaying postal facility closures

By Amanda Palleschi

April 17, 2012

The Senate voted Tuesday to debate a comprehensive U.S. Postal Service reform bill that aims to put the cash-strapped agency on a path to solvency.

The debate on the 21st Century Postal Service Act (S. 1789) is slated to continue in the coming days, with additional amendments likely to be introduced. A bipartisan amendment introduced Tuesday would require USPS to keep open 100 of more than 200 facilities slated for closure. In addition, the language from Sens. Susan Collins, R-Maine; Scott Brown, R-Mass.; Thomas Carper, D-Del.; and Joe Lieberman, I-Conn.; would correct some overlap between Medicare and Federal Employees Health Benefits Program enrollees and scale back requirements for overnight delivery for local first-class mail.

The provision also would encourage USPS to find creative business solutions, partly by appointing a chief innovation officer and establishing a Strategic Advisory Panel, which would include citizens.

The proposal leaves intact provisions to allow USPS to offer buyouts and early retirements to 100,000 employees for an anticipated $8 billion in savings, restructure prefunded retirement health benefits and let USPS reduce mail delivery to five days a week if officials cannot come up with savings within two years.

The Senate will vote on the bill after 30 hours of floor debate. Majority Leader Harry Reid, D-Nev., has told senators that he would like the vote wrapped up by the end of this week, but it could spill into next week, according to senate aides with knowledge of the process. The House still is working to gather enough Democratic votes to pass its major postal reform bill.

The House measure would shift delivery from six to five days a week without the two-year waiting period and would require establishing a panel similar to the Defense Department’s Base Closure and Realignment Commission to decide which facilities to shutter.

The Collins-Brown-Carper-Lieberman proposal on the Senate side also “expands the alternatives” USPS must consider before closing a post office. Senate aides familiar with the legislation said those alternatives included opening a complaint process in local communities, or changing the office’s format – such as moving it to a kiosk or locating it within a larger business such as a Wal-Mart.

The bill’s co-sponsors said it could reduce USPS’ total retiree health care costs to $3.5 billion annually. Currently, the service’s retiree health care costs are $8 billion to $9 billion a year, due to a 2006 law requiring USPS to set aside about $5.5 billion a year to prefund its retiree health benefits, a senate aide explained.

“Where cuts and consolidation are proposed, S. 1789 requires that other options be considered beforehand and that USPS’s decisions are based on sound planning with adequate transparency and public input,” Lieberman said. “We believe this approach offers the best hope for stabilizing the Postal Service and putting it on solid footing long term, without dramatic and perhaps self-defeating cutbacks in service.”

USPS is slated to move forward with facility closures by its May 15 deadline if lawmakers fail to pass an overhaul package. The Senate bill faces serious opposition. Labor unions have been critical of plans to cut workers and delivery services.

On Tuesday, the National Association of Letter Carriers released its own overhaul recommendations, developed with Lazard Group, an independent advisory firm. The union, which represents about 275,000 mostly urban letter carriers, proposed addressing USPS prefunding requirements, growing some of its services, and raising selected postage and parcel rates.

The Senate bill is “a stop-gap, not a solution,” NALC said.

“There is little in the proposed legislation that addresses potential expansion of services, more flexible product pricing, or necessary changes to the Postal Service’s oversight and governance -- all key elements of a comprehensive plan to create a sustainable and viable Postal Service,” the Lazard Group’s white paper stated.

Sen. John McCain, R-Ariz., who proposed legislation in the Senate that is more similar to the House bill, took issue with S. 1789's delay on shifting from a six-day delivery schedule to a five-day schedule and holding off on closures, citing a recent Government Accountability Office study that found facility closures would help USPS meet its goal to save $22.5 billion by 2016.

“It’s delaying what is necessary,” McCain said of the Senate bill. “And that is, to have five-day delivery.”